2022 (4) TMI 516 - AT - Service Tax

Tribunal grants refund to assessee in CENVAT Credit case

C.C.,C.E. & S. T-BELGAUM Versus BELLARY IRON ORE PVT LTD.

The Tribunal upheld the direction for substantial refund to the assessee in a case concerning a refund claim under Rule 5 of CENVAT Credit Rules, 2004 for ... Refund of unutilised Credit - input services - Goods Transport Agency - Port Services, BAS, Erection & commissioning, Installation service - repair & maintenance service - telephone charges - consultancy services - rejection of refund on the ground that the assessee was ineligible to avail the cenvat credit on the input services claimed - period April 2007 to September 2007 - HELD THAT:- The issue is no more res integra since the same has been addressed to by this very Bench in the assessee’s own case for a different period and laid to rest vide in C.C.,C.E. & S. T-BELGAUM VERSUS BELLARY IRON ORES PVT. LTD. [2018 (10) TMI 219 - CESTAT BANGALORE] where it was held that The Commissioner (Appeals) has rightly held that the respondents are entitled to cenvat credit and there is no provisions contained in Rule 6(1) of the Cenvat Credit Rules when the final product is exempted from Central Excise duty by virtue of Notification 4/2006 CE dated 01.03.2006. Appeal dismissed - decided against Revenue. Issues:Refund claim under Rule 5 of CENVAT Credit Rules, 2004 for unutilized amount availed on various input services related to the manufacture of iron ore fines - Rejection of claim by adjudicating authority - Appeal before First Appellate Authority - Direction to sanction substantial refund - Revenue's appeal against the Order-in-Appeal.Analysis:The assessee filed a refund claim under Rule 5 of CENVAT Credit Rules, 2004 for an amount of Rs. 96,55,593/- on input services used in the manufacture of iron ore fines. The claim was rejected by the adjudicating authority, stating the assessee was ineligible for the credit. The First Appellate Authority directed substantial refund, leading to the Revenue's appeal. The Revenue contended that the assessee lacked Central Excise and Service Tax registration, was not a provider of output service, and the final product was exempt from duty, thus not entitled to credit under Rule 6(1) of CCR.The advocate for the assessee argued that the iron ore fines were excisable goods under Chapter 2601, and the exemption allowed them to clear goods at a 'NIL' rate of duty, negating the need for registration. They also highlighted a previous favorable order by the Bench in a similar case. The Tribunal noted that the issue had been addressed in the assessee's previous case, where it was held that credit could be availed when producing exempted excisable goods chargeable at a 'nil' rate of duty. Several precedents and judgments were cited supporting the assessee's entitlement to credit in such scenarios.Based on the precedents and the previous order in the assessee's case, the Tribunal found no merit in the Revenue's appeal. The Tribunal dismissed the appeal, upholding the direction for substantial refund to the assessee. The decision was pronounced in an open court on 30/03/2022.